Alveolar lung development is molded by fluid distension of terminal airways and cellular deformation. The pathway and effector molecules that transduce these mechanical signals during lung development are not well understood. Our long-term objective is to identify the paracrine mechanisms that underlie the physiologic and pathophysiologic effects of tissue stretch (mechanical deformation) on fetal lung development. Parathyroid Hormone-related Protein (PTHRP) is a stretch-inducible signal expressed by lung type II (TII) cells that promotes fetal lung development, in part, by stimulating differentiation of mesenchymal cells into lipofibroblasts (LIFs). The Mature LIFs express growth factors and lipogenic proteins, including leptin, which stimulate TII cell surfactant synthesis. We also have determined that disruption or inhibition of PTHrP/PKA signaling causes differentiation of LIFs into myofibroblast, (MYFs), leading to lung septation or scarring. Based on these findings, we will determine how these same paracrine interactions may be used to effectively induce embryonic stem (ES) cell differentiation into TIIs, LIFs or MYFs. Aim 1 of the parent application we are defining the interactions between PTHrP signaling and mechanical force during development of the distal lung, and determining the molecular mechanisms underlying PTHrP-inducible differentiation of mesenchymal cells into LIFs. In the supplement, we will treat ES with PTHrP and/or cAMP agonists to induce signaling between TIIs and LIFs, and determine how ES differentiation into TIIs or LIFs can be accelerated. Conversely, we will induce MYF differentiation of ES cells by treating them with a PTHrP antagonist. In Aim 2 of the parent application, we are determining how leptin signaling promotes TII cytodifferentiation. Therefore, in the supplement we will induce leptin (LIF) and leptin receptor (TII) expression by treating ES cell with PTHrP or cAMP agonists. Understanding these mechanisms will enhance knowledge as to how stem cell function in lung injury/repair, and how they may be used effectively to treat lung injury and chronic lung disease in infants. [unreadable] [unreadable] [unreadable]